M/S.Chennai Metro Rail Limited vs 2] Afcons Infrastructure Limited
2021 Latest Caselaw 11351 Mad

                                                                       Original Petition Nos.96 & 97 of 2021

                                  THE HIGH COURT OF JUDICATURE AT MADRAS

                                         Reserved on           Delivered on
                                         20~10~2021             28 ~10~2021

                                                   CORAM:
                                  THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR
                           ARBITRATION ORIGINAL PETITION Nos.96 & 97 of 2021 &
                                             A.Nos.2868 & 2870 of 2021

                M/s.Chennai Metro Rail Limited,
                Administration Building,
                Chennai Metro Rail Depot,
                Poonamallee High Road,
                Koyambedu, Chennai – 600 107.                            ... Petitioner in both O.Ps.

                                                       .Vs.

                The Joint Venture M.s,Transtonnelstroy – Afcons JV
                Comprising of,

                1] Transtonnelstroy Limited,
                   4/1. Luganskaya Str,
                   Moscow, 115516, Russia.

                AND

                2] Afcons Infrastructure Limited,
                   Afcons House, 16, Shah Industrial Estate,
                   Veera Desai Road, Azad Nagar [P.O.],
                   Post Box No.11978, Andheri [W],
                   Mumbai – 400 053.                                 ... Respondents in both O.Ps.

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Prayer: Petitions filed under section 34 [2] [a] [iv], 34 [2] [b] [ii], 34 [2A] read with sections 18 and 28 of the Arbitration and Conciliation Act, 1996 [As Amended] to set aside the impugned Award dated 01.06.2021 passed by the Arbitral Tribunal and allow these petitions with costs.

                                      For Petitioner           : Mr.R.Yashod Vardhan, SC
                                                                 for Mr.S.Arjun Suresh

                                      For respondents          : Mr.G.Masilamani, SC
                                                                 for Mr.D.Balaraman


                                              COMMON ORDER

Aggrieved over granting extension of time in both the petitions O.P.No.96

of 2021 and 97 of 2021 have been filed challenging the awards.

2. The subject matter of O.P.No.96 of 2021 is the scope of work relating to

design and construction of underground stations at Shenoy Nagar, Anna Nagar

East, Anna Nagar Tower, Thirumanalam and Associated Tunnels in respect of the

Contract No.UAA-05 The date of commencement of the contract was on

07.02.2011 and scheduled date of completion was on 07.01.2015. The total

Contract value is Rs.1030.99 crores. However, the revised completion date was

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agreed upon between the parties by an addendum dated 29.08.2013 and the

completion dated was extended upto 05.07.2015.

3. In respect of subject matter of O.P.No.97 of 2021, the scope of work

relate to design and construction of underground stations at Washermanpet,

Mannadi, High Court, Chennai Central and Egmore and Associated Tunnels in

respect of Contract No.UAA-01. The contract commencement date was on

07.02.2011 and scheduled completion date was on 07.04.2015. The value of the

contract was Rs.1556.81 crores. The revised completion date as per the addendum

was extended upto 30.03.2016.

4. As the dispute arose between the parties in respect of the contracts,

particularly, with regard to the extension of time, the matter has been referred to

arbitral tribunal. The claimant herein after called as TTA-JV made the claim in

respect of the contract in U.A.A.No.05 [O.P.No.96 of 2021] before the arbitral

tribunal. In Claim No.1 extension of time is sought up to 28.12.2017 for the

events between 07.02.2011 and 31.12.2012. In Claim No.2, extension was sought

upto 26.01.2019 for the events between 16.04.2013 and 31.05.2014. However, the

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Arbitral Tribunal had passed the following award :

1] The Claimant is entitled to an Extension of Time for 179

days for overall completion of the works [i.e., KD-17: Achieve

issuance of taking Over Certificate] with the revised Key dates as

per Annexure – 1 of Addendum No.1, on account of Respondent's

delay upto 15.04.2013.

2] The Claimant is entitled to further Extension of Time for

302 days for overall completion of the works with revised date as

02.05.2016 [i.e., KD-17: Achieve issuance of Taming Over

Certificate] and with revised key dates for completion of individual

Key dates as tabulated in Annexure -9 of this award, on account of

respondent's delay upto 31.05.2014.

3] The Claimant is not liable to pay any Liquidated damages

till the revised date for achievement of each Key Dates as detailed

in Annexue – 9 of this Award and the refund of LD amount under

Claim Nos.1 & 2 of this Award shall be made only upon

considering the further revision of Kds if any in the final

adjudication of all extension of time claims under the Contract.

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4] The Parties are directed to equally share the Arbitrators

fees and Arbitral proceedings expenses. However, th expenses

incurred by each party in connection with the preparations,

presentations etc., of its case prior to, during and after the

proceedings shall be borne by each party itself.

5. O.P.No.97 of 2021 is in respect of the contract in U.A.A. No.01, wherein

the claimant, before the arbitral tribunal in Claim No.1 claimed extension of time

is sought up to 28.12.2020 for the events between 07.02.2011 and 28.02.2013. In

Claim No.2, extension was sought upto 15.05.2021 for the events between

16.04.2013 and 31.05.2014. However, the Arbitral Tribunal had passed the

following award :

1] The Claimant is entitled to an Extension of Time for 357

days for overall completion of the works [i.e., KD-19: Achieve

issuance of taking Over Certificate] with the revised Key dates as

per Annexure – 1 of Addendum No.1, on account of Respondent's

delay upto 15.04.2013.

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2] The Claimant is entitled to further Extension of Time for

851 days for overall completion of the works with revised date as

29.07.2018 [i.e., KD-19: Achieve issuance of Taming Over

Certificate] and with revised key dates for completion of individual

Key dates as tabulated in Annexure -9 of this award, on account of

respondent's delay upto 31.05.2014.

3] The Claimant is not liable to pay any Liquidated damages

till the revised date for achievement of each Key Dates as detailed

in Annexue – 9 of this Award and the refund of LD amount under

Claim Nos.1 & 2 of this Award shall be made only upon

considering the further revision of KDs if any in the final

adjudication of all extension of time claims under the Contract.

4] The Parties are directed to equally share the Arbitrators

fees and Arbitral proceedings expenses. However, th expenses

incurred by each party in connection with the preparations,

presentations etc., of its case prior to, during and after the

proceedings shall be borne by each party itself.

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6. Since both the Original petitions relate to extension of time and the

challenge was made on the same grounds, this Court is inclined to dispose both the

Original Petitions in a Common Order.

7. Though several grounds have been raised, the main challenge against the

award is that no opportunity has been given to the petitioner herein. Besides,

unmarked documents have been relied upon by the arbitral tribunal after

concluding the arguments of both sides and without giving any opportunity to the

petitioner to disprove the data said to have been produced by the respondent

herein. The learned Senior Counsel appearing for the petitioner has pressed his

arguments mainly on the ground that the very data or particulars relied upon by the

respondent were disputed by the petitioner. Such being the position, when the

correctness of the entries in the so called software were disputed and without

giving an opportunity to produce evidence to show that such particulars were

entered by the respondent on their own, the same goes to the root of the matter.

Hence, it is his contention that the learned arbitral tribunal have relied upon the

unmarked documents without giving an opportunity to the petitioner. Therefore, it

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is his contention that such procedure adopted by the trbunal in passing the award

in extending the time limit [EOT] cannot be sustained in the eye of law.

8. Whereas, the learned Senior Counsel appearing for the respondent

mainly contended that the data and the particulars were maintained from the very

inception of the contract and copies have been furnished to the petitioner. The

software relied upon by the arbitral award were sought to be maintained as per the

contract. In the contract itself, it is specifically agreed that only the software

which was produced has been maintained by the parties and various details and

data have been entered then and there and copies have been furnished to the other

side. Only such data have been relied upon by the learned arbitral tribunal being

the technical persons. In such view of the matter, it is his contention that merely

because further opportunity has not been provided to the petitioner, it cannot be

said that no opportunity has been provided. It is his contention that what was

relied upon by the arbitral tribunal is the admitted documents. Therefore, the

question of granting further opportunity will not arise. It is his further contention

that as per Clause [4.14] CPA [15], Appendix [4] Employer's Requirement

– programmes relating to submission of Baseline Programme [BLP]

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and updated Baseline Programmes on the monthly basis to the ER with a copy to

CMRL in Primavara P6 Software as per the requirement of Contract Clause 3 of

Appendix 4 Programme Requirements. It is his further contention that the primary

object of the above said programme was to monitor the progress works, through

the special computer software [Primavara P6] especially when the monthly

updated dated programme running more than 100 printed pages containing 1000s

of datas / numbers relating to achievements of Key Datas [KDs] for this complex

project with various interface and system wide contractors operating in

overlapping works of several kinds.

9. It is the further contention of the learned Senior Counsel that pursuant to

the contract clauses TTA-JV submitted the Baseline Programme [BLP] [detailed

chart with dates for commencement and completion of each work by the

Contractor] to ER and the same was approved on 27.07.2011. It is his contention

that the said BLP was submitted before the Tribunal along with SOC. Further,

TTA-IV had submitted contemporaneously regular monthly Updated Rolling

Programmes to the ER with a copy to CMRL. Moreover, the said programmes

were uploaded in the DMS [Document Management System], which were

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accessible to the ER / CMRL. Such updated monthly Programmes upto

28.02.2013 and 31.05.2014 were submitted to the respondent /CMRL [Hard &

Soft Copy] on 08.03.2013 and 16.06.2014 respectively. The same were received

and acknowledged by the ER / CMRL. As per Clause 5.5 of Appendix 4,

Programme Requirements of the Contract, the ER shall review and comment on

the Programme and information submitted by TTA-JV, within 4 weeks and

otherwise issue notices, if any. Having received the programme and information

on 08.03.2013 and 16.06.2014, ER did not issue any notice or otherwise on the

submission made by TTA-JV. Whereas, for the first time in their memo dated

30.09.2020, the petitioner has denied the contents of the programmes before the

tribunal. Before the Tribunal, the petitioner also admitted that the Rolling

programme dated 16.06.214 submitted by the claimant is significant to the

adjudication of the present issue and the rolling and updated programmes forms

integral part of the contemporaneous records to determine the instant dispute.

10. It is his further contention that since the Monthly uptated programme

was submitted by TTA-JV, the said Rolling programme updated in

contemporaneous records. It is his further contention that the petitioner has

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neither objected to the direction of the Tribunal to produce the updated

programmes which was the same programme submitted in the year 2013, 2014 of

TTA-JV to ER and CMRL. Hence, it is his contention that the programmes

submitted before the tribunal is not a new one and therefore, it cannot be said that

the tribunal has no power to look into the document which is not in dispute.

Hence, it is his contention that merely because the number was not given for the

documents, it cannot be said that the tribunal has no power to look into the

documents. Therefore, the strict procedure of the Evidence Act cannot be

expected before the tribunal both in respect of rolling and updated programme.

The software was in possession of both the parties since 2013 and 2014.

Therefore, the alleged objection is nothing but an empty and useless formality and

the same is not maintainable. There is no allegation of misconduct or bias against

Arbitral Tribunal. The petitioner is aware of all the above details and it is already

spelt out in the affidavit filed in the application filed under section 23 of the

Arbitration and Conciliation Act. Therefore, they cannot contend that they have

no knowledge about the document. In support of his contentions, he relied on the

following judgments :

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MCDermott International Inc. Vs. Burn Standard Co.

Ltd. and others reported in [2006] 11 SCC 181

K.P.Poulose Vs. State of Kerala and another reported in

[1975] 2 SCC 236

Ssangayong Engineering Vs. NHAI reported in [2019] 15

SCC 131

Delhi Airport Metro Express Pvt. Ltd. Delhi Metro Rail

Corporation Ltd. reported in 2021 SCC OnLine 695

Delta Distilleries Ltd. Vs. United Spirit Ltd. reported in

2014 [1] SCC 113

11. It is not in dispute that the claim and cost related claims are pending

before the same tribunal in both the original petitions. The subject matter of the

awards is only for extension of time. It is relevant to note that the claimant

adopted the Key Dates as per the Addendum No.1 and sequences between Key

Dates as per the appendix 2B of the contract to arrive at the time of completion.

The learned arbitral tribunal infact has observed in Volume 2 of the impugned

award in page No.156 para [o] that apart from the reasons stated by the claimant,

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the erroneous logic adopted by the claimant in the Appendix – C might have

resulted to discrepancy in days of extension sought under EOT-1 & Claim No.1.

12. In para [q] of the award, the arbitral tribunal has held as follows :

In view of the above, the tribunal arrives at a conclusion that

after analyzing/arriving at a decision on individual delay events,

the same will be impacted in the respective contemporaneous

detailed work programme [CPM network Primavera programme],

to assess the effect on times for completion of individual Kds &

also on overall complete of works. The impact analysis shall be

performed by this Tribunal using the CPM programming software

[Primavera software] installed by he Claimant as per our

directions. It is relevant to note that the Tribunal themselves

analysed using CPM programma primavera installed by the

claimant as per the tribunal directions. Such primavera software

produced before the tribunal has not been accepted as documents.

It is not in dispue that these documents came on record after

completion of the arguments by both sides.

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13. Further, the tribunal in para 7.2.4 has held as follows :

“... During the cross examination, the C.W.3 confirmed some

of his statements. However, he is unable to reconcile some of the

calculatiosn and the quantification of the claims as pointed by the

respondent during the arguments. Further, C.W.3 has made some

incorrect statements as evident from the deposition that is relied

upon the respondent during the course of arguments. The Tribunal

observed various arithmetic and computational errors admitted by

C.W.3. The Tribunal also observed that there is a flaw in the

methodology and logic in quanitifcation of claims. Hence, the

quantification part of the claim explained by C.W.3 is not acceptable

by the Tribunal. Further, the Tribunal during the internal

deliberations decided to adopt Critical Path Method using Primavera

Software [P6], used in the project, which was furnished by the

parties. In view of the above, the evidence of C.W.3 with reference

to quantum analysis for determination of extension of time and

quantification of claims and the statements of C.W.3 wherein he

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himself admitted errors were not relied on by this Tribunal in the

subsequent analysis.”

and finally, the tribunal not relied upon the evidence of C.W.3, has analysed the

revised data work programme to arrive at a conclusion on EOT. Such documents

were unmarked before the tribunal during the course of trial or arguments and the

documents came on record only after the arguments and finally, the tribunal

passed the award granting extension of time. The entire extension of time is based

on the updated programme as on 31.05.2014.

14. The documents available on record placed before this Court indicate

that the claimant was taking steps to instal primavera software in the Presiding

Arbitrator computer tribunal only on 21.04.2021 and the communication also

indicate that the claimant is taking necessary steps for instalment of requisite

software. The rolling and the updated programme as on May 2014 have been

submitted to the ER on 07.06.2014 and the same was not marked before the

learned arbitrator.

15. The petitioner has filed an application under Section 23 of the

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Arbitration and Conciliation Act before the arbitral tribunal, wherein, a specific

stand has been taken stating that the purported impact analysis based on CPM

which took into account all events upto 31.05.2014 and the respondent infact

specifically disputed the contents of the rolling programme. The entries found

were disputed by the respondent namely the petitioner herein. It is their specific

case that the claimant has failed to consider any delays that are attributable to it

while preparing the aforesaid rolling programme and consequently, the petitioner

strongly denied the data and contents of the aforesaid document as well as the

alleged analysis of the claimant in preparing the same, in the entirety. In the same

application, the petitioner herein has submitted that the rolling programme dated

16.06.2014 to be taken on record to prove their case, besides the affidavit dated

07.07.2020 filed by the claimant. Objections have been filed by the claimant for

the above application. In para 6 of the objections, the claimant themselves

admitted that they are not relying on the rolling programme which sought to be

relied upon by the respondent. The learned arbitral tribunal has passed an Order in

the above application on 22.10.2020, wherein it has been held as follows :

“Further, when the respondent is denied the data and contents

of the said documents in its entirety and the Claimant is also not

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relying the said document, the Tribunal is unable to understand, why

such document is to be marked before this Arbitral proceedings and

more particularly at the concluding stage of arbitration proceedings.

5. However, the Arbitral Tribunal considered the said

application, since the reconstituted Arbitral Tribunal hearing the

matters afresh and the Affidavit of the Claimant dated 07.07.2020

being a recent document, the Arbitral Tribunal following the

principles of natural justice, decided to provide another and full

opportunity to the Respondent. Accordingly, the Rolling Progamme

dated 16.06.2014 is taken on record as Exhibit R-301 and the

Affidavit dated 07.07.2020 is taken on record as Exhibit R-302. The

above said two docuemnts are taken on record subject to relevancy

and materiality to the dispute before the Arbitral Tribunal. The

Claimant is also given liberty to raise the objections and to make

submissions with reference to the above said documents.”

16. It is to be noted that the tribunal had considered the communication by

way of an email in both cases on 16.04.2021 and 15.03.2021 directing the

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respondents herein to submit primavera software. The rolling programme of the

year 2013 was never marked before the arbitral proceedings. The above email

indicate that the primavera software was installed in one of the computer of the

tribunal which has not been communicated to the petitioner herein. Ultimately,

the tribunal extended time only based on the above unmarked rolling programme

as on 28.02.2013 and 16.04.2013 and 31.05.2014 respectively. When the parties

have raised certain dispute with regard to the data and entries which was stored in

the computer and software, merely because the particular software is sought to be

followed as per the contract, the contents or data cannot be taken as gospel truth

on its face value, particularly, when both sides have raised certain reservations as

to the rolling program. The tribunal being a technical member having decided in

their internal deliberations to analyse the data stored in the primavera software

ought to have given an opportunity to the parties, particularly after embarking

such an exercise. Only on such opportunity being given, the parties would have

been in a better position to show each of the entries are binding and reliable and

which of the entries are not relied and not proved. Only on the proof of such

entries or by way of an admission, the documents can be relied upon by the

tribunal. No doubt, strict rule of Evidence Act is not required to be followed by

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the Tribunal. However, fundamental principles governing the fields of

adjudication to prove any document cannot be ignored altogether. In this case, the

tribunal has relied upon the software and rolling programmes which was produced

after the arguments was over and the tribunal themselves had undertaken such an

exercise to analyse the entires and concluded its finding by extending EOT.

17. In McDemott International Inc. Vs. Burn Standard Co. Ltd. and others

reported in [[2006] 11 SCC 181], the Apex Court has held that the quantification

of claim computed by taking recourse to one other formula, having regard to the

facts and circumstances of the case, would eminently fall within the domain of the

arbitrator and if the arbitrator, applied a particular formula in assessing the amount

of damages, he cannot be set to have committed an error warranting interference

by the Court. Absolutely, there is no dispute with regard to the above judgment.

Though adopting the well known formula fall within the domain of the tribunal,

such a principle cannot be imported in relying any documents, which is, in fact,

not admitted by the other side.

18. In K.P.Poulose Vs. State of Kerala and another reported in [[1975] 2

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SCC 236, the Honourable Apex Court has held that if the materials required to

arrive at just and fair decision to resolve the controversy between the parties, even

if one party did not produce the documents before the arbitrator, it was incumbent

pon him to get hold of relevant documents for the purpose of just decision.

19. In Ssangayong Engineering Vs. NHAI reported in [[2019] 15 SCC 131,

the Hounourable Apex Court has held that the power of the Courts under Section

34 of the Arbitration and Conciliation Act to interfere with the arbitral award is

further restricted after 2015 Amendment of Arbitration and Conciliation Act. It is

not a case of drawing adverse inference. Whereas, the tribunal has relied upon the

documents which were unmarked, particularly, when both sides have not relied

upon the same during the adjudication process, without providing an opportunity

to the parties.

20. It is relevant to note that in the judgment of the Honourable Apex Court

in Ssangayong Engineering Vs. NHAI, it has been held as follows :

50. Section 24(3) is a verbatim reproduction of Article 24(3) of

the UNCITRAL Model Law on International Commercial Arbitration

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[“UNCITRAL Model Law”]. Similarly, Section 26(1) and (2) is a

verbatim reproduction of Article 26 of the UNCITRAL Model Law.

Sub-section (3) of Section 26 has been added by the Indian

Parliament in enacting the 1996 Act.

54. In Fouchard, Gaillard, Goldman on International

Commercial Arbitration (Kluwer Law International, 1999)

[“Fouchard”] it is stated:

“In some rare cases, recognition or enforcement of an award

has been refused on the grounds of a breach of due process. One

example is the award made in a quality arbitration where the

defendant was never informed of the identity of the arbitrators

hearing the dispute [Danish buyer v German (F.R.) seller, IV Y.B.

Comm. Arb. 258 (1979) (Oberlandesgericht Cologne)]. It also

occurred in a case where various documents were submitted by one

party to the arbitral tribunal but not to the other party [G.W.I. Kersten

& Co. B.V. v. Société Commerciale Raoul Duval et Co., XIX Y.B.

Comm. Arb.708 (Amsterdam Court of Appeals) (1992)], in another

case where the defendant was not given the opportunity to comment

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on the report produced by the expert appointed by the tribunal

[Paklito Inv. Ltd. v. Klockner East Asia Ltd., XIX Y.B. Comm. Arb.

664, 671 (Supreme Court of Hong Kong) (1994)], and again where

the arbitral tribunal criticized a party for having employed a method

of presenting evidence which the tribunal itself had suggested [Iran

Aircraft Indus. v Avco Corp., 980 F.2d 141 (2nd Cir. 1992)].” (at p.

987) 55. Gary Born (supra) states:

“German courts have adopted similar reasoning, holding that

the right to be heard entails two related sets of rights: (a) a party is

entitled to present its position on disputed issues of fact and law, to

be informed about the position of the other parties and to a decision

based on evidence or materials known to the parties [See, e.g.,

Judgment of 5 July 2011, 34 SCH 09/11, II(5)(c)(bb)

(Oberlandesgericht Munchen)]; and (b) a party is entitled to a

decision by the arbitral tribunal that takes its position into account

insofar as relevant [See, e.g., Judgment of 5 October 2009, 34 Sch

12/09 (Oberlandesgericht Munchen)]. Other authorities provide

comparable formulations of the content of the right to be heard [See,

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e.g., Slaney v. Int’l Amateur Athletic Foundation, 244 F.3d 580, 592

(7th Cir. 2001)].” (at p. 3225)

56. Similarly, in Redfern and Hunter (supra):

“11.73. The national court at the place of enforcement thus has a

limited role. Its function is not to decide whether or not the award is

correct, as a matter of fact and law. Its function is simply to decide

whether there has been a fair hearing. One mistake in the course of

the proceedings may be sufficient to lead the court to conclude that

there was a denial of justice. For example, in a case to which

reference has already been made, a US corporation, which had been

told that there was no need to submit detailed invoices, had its claim

rejected by the Iran-US Claims Tribunal, for failure to submit

detailed invoices! The US court, rightly it is suggested, refused to

enforce the award against the US company [Iran Aircraft Ind v Avco

Corp. 980 F.2d. 141 (2nd Cir. 1992)]. In different circumstances, a

German court held that an award that was motivated by arguments

that had not been raised by the parties or the tribunal during the

arbitral proceedings, and thus on which the parties had not had an

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opportunity to comment, violated due process and the right to be

heard [See the decision of the Stuttgart Court of Appeal dated 6

October 2001 referred to in Liebscher, The Healthy Award,

Challenge in International Commercial Arbitration (Kluwer law

International, 2003), 406]. Similarly, in Kanoria v Guinness, [2006]

EWCA Civ. 222, the English Court of Appeal decided that the

respondent had not been afforded the chance to present its case when

critical legal arguments were made by the claimant at the hearing,

which the respondent could not attend due to a serious illness. In the

circumstances, the court decided that ‘this is an extreme case of

potential injustice’ and resolved not to enforce the arbitral award.

11.74. Examples of unsuccessful ‘due process’ defences to

enforcement are, however, more numerous. In Minmetals Germany v

Ferco Steel, [1999] CLC 647, the losing respondent in an arbitration

in China opposed enforcement in England on the grounds that the

award was founded on evidence that the arbitral tribunal had obtained

through its own investigation. An English court rejected this defence

on the basis that the respondent was eventually given an opportunity

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to ask for the disclosure of evidence at issue and comment on it, but

declined to do so. The court held that the due process defence to

enforcement was not intended to accommodate circumstances in

which a party had failed to take advantage of an opportunity duly

accorded to it.

57. In Minmetals Germany GmbH v. Ferco Steel Ltd., [1999]

CLC 647, the Queen’s Bench Division referred to this ground under

the New York Convention, and held as follows:

“The inability to present a case issue Although many of those states

who are parties to the New York Convention are civil law

jurisdictions or are those which like China derive the whole or part of

their procedural rules from the civil law and therefore have

essentially an inquisitorial system, art. V of the Convention protects

the requirements of natural justice reflected in the audi alteram

partem rule. Therefore, where the tribunal is procedurally entitled to

conduct its own investigations into the facts, the effect of this

provision will be to avoid enforcement of an award based on findings

of fact derived from such investigations if the enforcee has not been

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given any reasonable opportunity to present its case in relation to the

results of such investigations. Article 26 of the CIETAC rules by

reference to which the parties had agreed to arbitrate provided:

‘Article 26 – The parties shall give evidence for the facts on which

their claim or defence is based. The arbitration tribunal may, if it

deems it necessary, make investigations and collect evidence on its

own initiative.’ That, however, was not treated by the Beijing court as

permitting the tribunal to reach its conclusions and make an award

without first disclosing to both parties the materials which it had

derived from its own investigations. That quite distinctly appears

from the grounds of the court’s decision – that Ferco was, for reasons

for which it was not responsible, unable ‘to state its view’. Those

reasons could only have been its lack of prior access to the sub-sale

award and the evidence which underlay it. I conclude that it was to

give Ferco’s lawyer an opportunity to refute this material that the

Beijing court ordered a ‘resumed’ arbitration.” (at pp. 656-657)

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21. The tribunal has relied upon the documents which has been disputed by

the other side without giving an opportunity to substantiate or disprove certain

entries made in the software and the conclusion of the tribunal is merely on the

basis of such documents, without an opportunity being granted and the same

certainly violates the procedure contemplated under section 34[2] [a] of the

Arbitration and Conciliation Act. Since the petitioner was not given an

opportunity to present their case, besides, the statements and documents not being

communicated to the petitioner and the same has been relied upon by the tribunal

and no opportunity has been given to disprove the contents of the documents,

particularly when the data and the entries have been denied by the petitioner

herein, this Court is of the view that the award of the arbitral tribunal extending

time without proper opportunity is liable to be interfered.

22. It is relevant to note that the dispute with regard to the other claims,

cost related claims are still pending before the arbitral tribunal. Though these

awards have been passed separately in respect of extension of time, since, the main

dispute in respect of various monetary claims are pending before the arbitral

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tribunal, the learned Arbitral Tribunal ought to have decided all the disputes in the

same proceedings instead of passing separate award for extension of time alone.

Since, the main dispute is still pending before the Arbitral Tribunal, it is well open

to the claimant to prove the documents and claim extension of time in the existing

proceedings. The learned arbitral tribunal can very well give an opportunity to the

parties in respect of extension of time sought by the claimant. After affording

proper opportunity to both sides, extension of time can be decided in the existing

claim itself which are pending before the arbitral tribunal in both the contracts

viz., UAA 05 and UAA 01. In such view of the matter, this Court is of the view

that the claimant instead of going for mere extension of time before the tribunal,

they ought to have referred the entire dispute including extension of time. As this

Court has found that no opportunity has been given and unmarked documents

have been relied upon by the tribunal, the award passed by the tribunal in both the

matters are liable to be set aside.

23. Accordingly, these Original Petitions are allowed and the award passed

by the arbitral tribunal in both the matters are set aside. The parties are at liberty

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to claim extension of time in the existing proceedings pending before the arbitral

tribunal. Consequently, connected applications are closed.

28.10.2021

vrc

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N. SATHISH KUMAR, J.

vrc

Common Order in:

ARBITRATION ORIGINAL PETITION Nos.96 & 97 of 2021

28.10.2021

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